The activity of cytosolic phospholipase A2 (cPLA2) may be altered by calcium or by phosphorylation of serines in the cPLA2 molecule. A dual hybridization system in yeast was used to identify protein-protein interactions which might also be involved in the modulation of cPLA2 activity. Using this system, a member of the S-100 family of protein was identified as interacting with cPLA2. In in vitro assays, this protein, p11, was found to inhibit phopholipase A2 activity. Immunoprecipitation of epithelial cell lysates using anti-cPLA2 antibody coprecipitated p11 protein. Antisense inhibition of pro- duction of this protein increased arachidonic acid release from airway epithelial cells. Therefore, p11 appears to be capable of modulation of cPLA2 activity. In addition, this protein is inducible with corticosteroid tratement. p11 gene expression is induced by dexamethasone treatment, which also reduces arachidonic acid release from epithelial cells. Overexpression of p11 protein by transfection of epithelial cells with a mammalian expression vector which drives p11 production mimics this dexamethasone effect on arachidonate release.